Topic: Bitcoin Credit Cards: How to create a POS device? - page 2. (Read 4349 times)

But why do the POS terminals need to change to support this?

Today, I can take a credit card that understands only GBP to Spain and purchase an item denominated in Euros from a shop.  I need to look-up where in the network the conversion from EUR to GBP takes place, but I can guarantee it's not in the POS device or at the retailer.   I'm pretty sure it's done at the issuer end, or at worst, by the switch.

The point is: this means that to support Bitcoin today, the only part of the *existing* infrastructure that would need to change would be between the switch and an issuer, in the worst case... and that would just be limited to adding support for an additional currency code.

The risk management could be entirely the purview of the issuer.

I guess my underlying point is: nobody expects retailers to accept more than one (or perhaps) two currencies today - why would we expect them to accept another one in the future?  Sure - a Bitcoin-only subeconomy would be interesting, but is it realistic?

Plastic cards are fine for me.

Having a card with some number other than the private key on it is a possibility, and would work well with the existing credit card financial market, but the downside is the centralization. In order to get a "bitcoin credit card" in that case, I have to open an account with the BitcoinInv or whoever is offering the service. That central authority now has my wallet file, and I have to transfer funds to my account there. Then, the situation is like I described; I only need to bring my card with my BitcoinInv account number on it with me to the store, and use their POS system to make the purchase from my account. However, that centralization now means BitcoinInv becomes a honeypot for thieves. If someone can get in and crack whatever security is behind all the wallet files there, they can walk away with funds from (potentially) anyone who has an account there (depending on the security measures in place).

Having the private key on the card itself, and if the POS system were independently-verifiable to not keep those private keys after being used, there's no central location for a thief to hit to steal all the customer's money.

So, yes, I'd like to see something like the process you're working on come to be, BitcoinInv, but in order to make it work, whatever agency becomes that central point needs to be big enough to be the central processing point, have the servers be reliable enough to handle lots of load, and have ironclad security. That, I believe, is a bigger hurdle than reprogramming a POS card scanner to understand the account number coming in isn't a credit-card-style number of five groups of four numbers, but a string of hex or base-58 characters, no?

I agree! The issue, however, is the "If/when". Currently the credit-card infrastructure has assurances like the FDIC and whatnot that make me the consumer feel okay handing my credit card to a waiter to go do something a back room with (presumably charge me for my dinner and nothing more). Getting to that point is a great long-term goal, but to start with, but there's no one big enough yet to be the strong arm that cracks down on Bitcoin fraud and insures other central processors if they get robbed. So the power needs to stay with the consumers; I'd just like to see it make the step away from owning a smartphone to be the barrier to entry in the day-to-day transactions with Bitcoin.

Until the day that there's an agency that insures other central bitcoin processors against theft, I won't be keeping any large amounts of coins in online accounts such as the one you're describing, BitcoinInv. But still keeping pocket change there for day-to-day expenses would be quite convenient, and I would take advantage of that.

The system could focus on accepting BTC, but the payment processor would offer to buy those bitcoin from the merchant immediately. The only addition would be logging the exchange price for each transaction to properly reimburse the merchant at the end of the day/payment cycle.

Thats why our system give the merchant the option at the time of taking LTC, USD or BTC.

What about doing it in stages? For example a MtGox card that throws cashback into your MtGox account.

Trying to make deals with the current payment processors, and convince them to reprogram devices to accept Bitcoin would be an incredibly wasteful and expensive undertaking. More headaches then necessary and the whole point is to break away from the current system.

Thankfully credit and debit card terminals are a very simple technology, it would not be difficult to produce a more cost efficient device geared towards Bitcoin. The only problem is getting merchants to adapt it like you said. There needs to be a reason why they personally would want to accept and hold bitcoin before you convince them to invest in a bitcoin terminal.

If they'll be going through the hassle of converting back to fiat anyways, why bother.

Looking at this practically, lets say you have a plastic debit card which links to an online wallet.

Load up your debit card from your local fiat currency, and pay your bills in bitcoins (or alt coins) and you only have to swap back to fiat when you want to (and get charged for the pleasure).

The retailer can choose to get paid into a bitcoin account, or into a their standard payment gateway account.

The next stage of the bitcoin story is that the public need to know why they would want it.

To me, the advantages of bitcoin to the public are that its inflation proof and it can be used internationally both in person or online without having to worry about forex charges.

That would tend to suggest that the natural market for bitcoin to start with are business people with international companies.  Therefore, if you want to get to them, how about creating a debit card for expense accounts?

Think of it like an AmEx card - exclusive and desirable, with real benefits that financially astute people understand. Get them to buy into using such a card, and slowly, bitcoins will work its way down the food chain to Wall Mart!

Maybe the trick is to talk to a card provider who deal with these types of clients?

Exactly. If/when bitcoin (or a successor) takes off big-time it will be enabled by a network of complementary services. The idea that the average retail customer will interact directly with the core bitcoin network, with the associated pain of wallet management, transaction absolute finality (ie no chargeback, aka consumer protections) and the rest, strikes me as ludicrous. In time, it will come to be seen as "just another currency", adopted because of its primary benefit of predictable money-supply growth. The bitcoin network will be the currency's (near)RTGS. The world's financial plumbing system (visa, CLS, SWIFT, whatever) will require little more than trivial tweaks to support it (primarily, links to the bitcoin core network for gross settlement transactions). If this prediction is true then the world's POS devices can already support bitcoin with next-to-no effort.

Thanks

Thank you, this is exactly what I have been saying. We don't have to restructure society altogether. Some things work well, like carrying around a plastic card instead of something with "real" value that can be lost or stolen.

Tipped +.002 btc

Did you watch the video I posted? You described everything that it doeslol

Just use a plastic card with a credit card style number on it, and a pin

You give this to the retailer who reads it with their standard card reader.

The details get sent to the payment gateway, and that does the hard work through the likes of bitpay who do a deal with streamline or whoever does the credit card payment services in your region.

The retailer get their confirmation and money minus charges.

Happy customer!

Opps, have I just broken a taboo?

The problem with the ideology of wanting total independence from the banks is that without them, you don't get any customers either - Yes, you could bring your own hardware, but its just too much for a retailer to worry about.  To get the service into the shop, you must go through the payment gateway company who are already there.  Don't worry there are a few of them, unfortunately, they are mostly banks or closely connected with them.

Rather than reinvent the wheel - again - why not work with the likes of bitpay to make them the byword for bitcoin in stores?

Just my 0.002 btc

Whats wrong with a plastic card?

Yes, that's the "normal" transaction method at the moment. The QR codes being scanned are relaying the public Bitcoin address(es). What I'm proposing is some way to relay the private key, such that the customer doesn't need to have a phone on them to make a purchase (the flaw I want to fix is that I as the consumer need to bring my hardware to make a purchase).

Hmm I don't see this being to much of a problem the store has to have some really high tech cameras. I'm not sure if you've seen recordings of store footage, but honestly I don't know how they catch robbers with them, let alone read a ton of small black boxes.

The camera will also have to be directly above where your phone is read, no glare, good angles etc.

Sorry if this isn't what you mean.. Because every time I do a sale in person with bitcoins, they log into their blockchain.info account, I log in mine, a QR code is scanned, and coins are transferred.
I have not done a ton of trades like this and its been a good while a month and half or so.. But if I recall, the customer scans my QR code? I don't get to see any of their data.



The only flaw.. Is the fact that the customer can change the amount to be sent.

I got a system that works with Card readers and so forth, the problem is most card readers are 2 or 3 track, Visa,MC and AMX.
Getting a merchant to buy/rent give them another card reader is hard. One of our projects is geting a card writer and programming some cards, our software allows us to issue and accept "cards" The card can be used for whatever currency you have in your account we currently will be supporting USD, BTC and LTC.
http://www.youtube.com/watch?v=QyK9kdEgxCA&feature=youtu.be

We are low on capital and it is kinda holding up projects like this but that video is quick vid sorry for the incomplete and lack of editing.

So, while there's several good ideas out there, the crux of the matter is still how to get additional logic on handling Bitcoins into the equipment that retail stores have. I've never opened a brick and mortar store, so who supplies stores with the POS credit card scanners? What OS/programming language are they running? Do the manufacturers of those POS devices have developer programs to submit new payment methods?

Does anyone out there have experience implementing a custom in-store credit card or loyalty card system with a standard retail setup? I know those exist already, and I hope they have the potential to be a way Bitcoin logic can get inserted in.

Decentralization is not necessary for the process you've described. Quite the opposite, actually; it needs centralization to work, focused on one or few central banking authorities. The point I was trying to make regarding decentralization is that Bitcoin is based on principles of decentralization, so solutions that move it toward centralization go counter to that fundamental belief, and probably wouldn't be as readily adopted. Yes, the fees by a central banking authority could be just enough to break even, but if there's only one bitcoin central processor, they're not really competing with the standard credit card processors, so is still pretty close to a monopoly, and could charge whatever they want.

Can you explain to me why decentralization would be necessary for a service like this?

The fees are not for profit. They are the minimum required to maintain the integrity of the service being offered at no cost to users. Merchant transaction fees are hardly the issue here, it's the monopolies credit card companies have over all digital transactions be they at POS or online.

You said it yourself, it's a new currency. It's not a payment processor, nor was it meant to replace them. Credit card companies didn't appear from nowhere, they came about when it started becoming more convenient to carry a plastic card than fragile paper currency.